James protects stimulus payments from debt collectors

New York News

NEW YORK (NEWS10) — New York Attorney General Letitia James announced official guidance to keep stimulus payments from being seized by debt collectors. The announcement comes as billions of dollars have been sent to Americans as part of the American Rescue Plan.

The official guidance from James excludes certain types of payment—public assistance, social security, and veterans and retirement benefits—from garnishment by debtors. Under New York law banking institutions, creditors, and debt collectors, cannot “freeze” funds in these accounts.

Letitia James explained the guidance in a statement:

“This official guidance makes clear that banks and debt collectors cannot freeze or seize stimulus funds that are intended for New Yorkers, especially those most in need during this time. My office remains committed to protecting New Yorkers’ rights, and ensuring that any institution that violates this guidance will be held accountable to the fullest extent of the law.”

Letitia James
New York Attorney General

The Office of the Attorney General says the guidance is based on multiple state and federal consumer protection laws.

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